G R Infraproject Q2 FY27 Results (NSE: GRINFRA)
Signal: Growth reaccelerated
The read
The key inflection is growth without margin recovery: standalone revenue rose 63.6% YoY to ₹2,01,910.11 lakh, but operating margin fell 27bps YoY to 9.49% after a 410bps gross-margin compression. This follows the prior quarter's 11.02% standalone operating margin and indicates that execution growth is currently arriving with weaker conversion; H1 operating margin was 10.33% versus 11.49% in the comparable period.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,019.1 Cr | +63.6% | -16.7% |
| Net profit | ₹161.04 Cr | +23.1% | |
| EPS | ₹16.64 | +23.1% | |
| EBIT margin | 9.49% |
P&L walk
Standalone revenue increased to ₹2,01,910.11 lakh, +63.6% YoY, but gross margin compressed by 410bps and operating margin fell to 9.49% from 9.76%; PAT still rose 23.1% to ₹16,103.63 lakh, helped by lower finance and depreciation costs.
Key positives
- Standalone revenue increased 63.6% YoY to ₹2,01,910.11 lakh, showing a strong execution ramp despite a 16.7% sequential decline.
- Finance costs fell 50.3% YoY to ₹561.51 lakh and interest service coverage improved to 41.27x from 29.50x.
- Employee costs rose 18.9% YoY to ₹16,582.76 lakh, far below revenue growth, providing some cost absorption despite gross-margin pressure.
- Basic EPS rose 23.1% YoY to ₹16.64 and tracked PAT, with no dilution-related divergence.
Key concerns
- Gross margin compressed 410bps YoY to 19.56% as direct construction and material costs rose to 80.45% of revenue from 76.34%; the filing does not disclose the driver.
- Operating margin declined to 9.49% from 9.76% YoY and 11.02% QoQ, continuing the recent margin weakening despite 63.6% revenue growth.
- H1 operating cash flow turned negative at ₹38,450.85 lakh versus ₹40,651.26 lakh generated in H1FY26, with receivables up ₹26,913.29 lakh and inventories up ₹10,308.60 lakh.
- PAT growth of 23.1% materially lagged revenue growth of 63.6%, indicating weaker earnings conversion.
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